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Efficient contract management within the business processes of ERP systems

Today the automation of corporate document management has become an evident need. Corporate documents are binded with customers, marketing activities, projects, suppliers, etc., so the integration of the business processes of document flow with ERP systems has arrived to the frontground.

Most ERP systems, and SAP R/3 in particular, incorporate document management functions, but normally they are not preconfigured to account for local  namely Russian  docflow specifics. Meanwhile, there are specialized document management systems, which can be successfully implemented in Russia. Obviously, these two kinds of systems should be tightly integrated to ensure complex automation. This usually causes certain problems: troubles with data and business processes integration; necessity to maintain two different IT systems; limited scalability; different user interfaces make it more difficult to the personnel to gain ample user skills. So, how can one profit from the joint usage of ERP and document management functionality and minimize the integration efforts? The optimal way depends on real circumstances and the customers aims.

Alternative approach to integrating contract management functionality with ERP business processes

GazIntech was involved in the project of contract management automation of a large-scale oil and gas company that was in the midway of implementing SAP R/3 ERP system. The foremost demand was to create a central contract data repository, which would allow to keep a record of contracts and related documents, manage contracts lifecycle, and, as a main feature, to provide these data promptly to the end-users. Although SAP R/3 incorporates embedded functions for contract management support, they were not enough for the enterprise. In particular, R/3 doesnt provide tools for managing contract master data centrally. The approach suggested by GazIntech made it possible to enjoy the advantages of full-featured contract management under one ERP system via integrating a specialized contract management solution with SAP R/3 business processes.

A special Contract Management System (CMS) was developed on the SAP platform. This system enhanced standard ERP capabilities with new functions that matched the Russian specifics and the customers needs. At the same time, CMS makes use of R/3 master data, like the information about the enterprises organizational structure or about system users. This approach helped to avoid integration problems and to make the most of the existing IT infrastructure of the enterprise. In their turn, these results led to implementation project costs and terms reduction.

As a result, GazIntech developed and rapidly implemented an IT system that supported the following range of features: contract master data management; business partners master data management; e-archive of contract-related documents; web access to the end-users.

The Contract Management System has been efficiently exploited since summer 2002. Moreover, the enterprise administration made it obligatory to perform any payments only by the contracts registered in the System. The positive effects are: prompter availability of the contract data, higher security of the documents, and even stricter financial discipline. During live productive operation end-users requests for enhancements have been collected and analyzed. Among the most important issues there were the automation of contract documents preparation (i.e. creation, approval and sign-off) and the informational support for complaints management. GazIntech greatly enhanced the CMS functionality, especially in the area of document management, taking into consideration end-users?

Presently, the Contract Managemenet System is a ready-made solution ensuring efficient contract management throughout the documents life-cycle. This solution can be rapidly adapted to the needs of a particular customer. The System comprises the following modules: Contract management Business partners catalog Contract draft management Electronic documents archive.

The functions of the business partners catalog have been much extended. Currently GazIntech is developing the module to address complaints management tasks. The System also envisages automated input and storage of large amounts of documents via a mass information capture system, Kofax Ascent Capture, integrated with the IBM Content Manager e-archive. This ability both eases processing and optimizes managing large amounts of documents. Due attention is paid to the informational security of the Contract Management System. SAP R/3, which is the software platform for CMS, is certified according to 4th security class and can be used to develop software applications with up to 1B security class. Digital signatures are also supported.

Those customers who do not use SAP R/3 can purchase the Contract Management System as a separate solution based on a new technological platform, SAP NetWeaver, which makes it possible to easily integrate CMS with any ERP system. Yet it is noteworthy that for the best results the Contract Management System is advised to be used with SAP R/3. Main advantages of considered approach As a summary of the advantages of integrating contract management functions into the business processes of SAP R/3, we can list the following pluses: Seamless information integration  data consistency and integrity Seamless business processes integration Complex support of contract management processes High scalability Common security system Unified user interface Centralized backup Simplified version update

Anyway, fewer number of IT systems implemented within one enterprise eventually leads to shorter implementation terms and lower TCO. This approach was utilized to develop GazIntech?s document management solution based on SAP platform.

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